The Perfect Investor

Written by Jay Turo on Wednesday, May 28, 2014

There were a lot of Warren Buffett "hero worship" type responses to my posts last week on "Doing As Warren Does" and applying the principles utilized to make Berkshire Hathaway the most successful investment company of all time.

And it is understandable why so many people - from very different world views and levels of financial sophistication - rightly consider Mr. Buffett to be the “Perfect Investor.”

His qualities in this regard are almost cliché - honest, humble, frugal, opportunistic in the face of adversity, and possessing of an other-worldly foresight as to where and how to find outsized returns.

And he is on record as saying that he rarely invests in technology companies as he does not feel qualified to properly diligence and understand them.

Both of which beg the question as to whether the “Buffett Way” is still the way to win in this global, technological age of ours?

And if it is not, then who will be the The 21st Century Warren Buffett?

The Perfect Investor for our era?

While the identity of this person will be almost impossible to discern before the fact, he or she will almost assuredly possess these characteristics:

They Will Love Risk. Relative to the Mid-Century America in which Warren Buffett developed his philosophy and approach, our era of global and hyper-warp speed technological change requires a much different approach to uncertainty and loss.

While Mr. Buffett was able to build an alpha-performing portfolio without significant risk-taking on any one position, the modern investor simply does not have this luxury.

Instead, they must be far more comfortable and proficient with an “Outlier” approach, where a few big wins offset middling performance - and even complete loss of principal - on the significant majority of held positions.

They Will Focus on Market Opportunities More than on Execution. While quality, determined execution will always be at the heart of successful business-building, our Modern Day Perfect Investor will recognize this as a necessary, but by no means sufficient condition for business and investment success.

Far more important will be “visionary” assessments of global markets, specifically as to which types and forms of technology will disrupt these markets over the next 5 to 10 years.

They Will Possess a “Modern” Morality. The idea that that which is moral and right needs to be updated alongside the wild, rapid, and continuous updating of our technologies is a hard one for those of a certain age and era to accept and embrace.

Yes, perhaps “prudent” and “conservative” in this Brave New World of ours are as much barriers to success as they are emblematic of it?

Maybe pomp, flash, celebrity - as opposed to being things to be frowned and looked down upon - instead are assets to be nurtured and promoted.

Maybe morphing one's business model on annual, quarterly, or even monthly basis is not a sign of scattered focus, but rather a necessary competence to survive and prosper in our modern conditions of permanent uncertainty.

It may sound and be unsettling.

But to paraphrase an old but yet very modern philosopher it is sometimes only chaos that can give birth to a dancing star.